A blawg containing a periodic review of topics of interest in corporate and commercial law that impact India

Tuesday, September 3, 2013

Companies Act, 2013 Receives Presidential Assent

Although press reports indicated last week that
the Companies Act, 2013 had received the assent of the President, the official
confirmation is now available. The Gazette
notification, which also carries the legislation as enacted, indicates that
the Presidential assent was received on August 29, 2013.

Currently, while the law has been enacted
in its entirety, it is yet capable of implementation as the substantive
sections of the Act are still to be notified. Only section 1 of the Act has
come into effect, and section 1(3) provides:

This section
shall come into force at one and the remaining provisions of this Act shall
come into force on such date as the Central Government may, by notification in the
Official Gazette, appoint and different dates may be appointed for different
provisions of this Act and any reference in any provision to the commencement
of the Act shall be construed as a reference to the coming into force of that
provision.

The Companies Act
provides the broad framework and a substantial part of the details of the
corporate law regime will be governed by various sets of rules to be
promulgated by the Central Government. The implementation of the Act will be
subject to finalization of the rules, and hence various substantive provisions
will become effective once the respective rules are promulgated. Hence, it is
likely that there could be a phased implementation of the Act, somewhat similar
to the process followed in the case of the UK Companies Act of 2006. In that
case, a timetable for implementation was set out upfront, but in India’s case
there is an element of uncertainty as no implementation schedule has been
announced yet.

2 comments:

Gokkamokka
said...

But the notification states that "it is published for general information" - Surely it cannot mean that publication for information purposes brings it into effect Section 1. If that were the case, then as per Section 1(4), the provisions of this Act would be applicable to companies existing today. So in such cases, we would have both Companies Act, 1956 and Companies Act, 2013 being applicable to an entity. My two cents is as and when there is a specific gazette notifying provisions of the Act, then Section 1(3) will come into effect. Until then, this legislation published in the gazette remains an 'Agreed Form'- a version that can be used as an official version.

IMPROMPTURefer the reproduced provision of section 1 (3). It ought not to have been over-sighted, but rightly require to have been made a conscious note of, that such a provision typifies and is reminiscent of the lately developed practice, not a palatable one. That concerns the pattern of legislation that has come to be increasingly adopted, and largely accepted/invariably taken in the stride.If remembered (subject to checking), one such legislation is the Regulatory Bill for the realty sector but long pending enactment.In one's conviction, this type of legislation, leaving open to be given effect, not in go but in bits and pieces, that too with no certainty of the timing of it, has the potential to numerous legal, besides ethical, controversies. So much so, entail the otherwise avoidable scope for an inconclusive, mainly the apprehensive cum reprehensive lawyer -stimulated, litigation. It is for eminent law experts, truly righteous with an impartial thinking among them, to devoutly deliberate and make their well-considered multidimensional views/opinion known to the concerned rest / the men in power, essentially in the larger public interest.

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